Chavez eyes China oil deals

China and Venezuela are to sign agreements this week enhancing cooperation in oil exploration and securing Chinese help for Caracas in building a fibre-optic communications network.

23 Aug 2006 06:26 GMT

Chavez is beginning a six-day visit to China

"We are going to sign a series of agreements for another leap in energy cooperation," Hugo Chavez, the Venezuelan president, said soon after arriving in Beijing on Wednesday.

He said last week that he will buy Chinese-made oil tankers and seal an oil exploration deal.

The visit by Chavez comes amid growing Venezuelan oil sales to China, which wants increased access to Latin American energy sources for its booming economy. Chavez also plans to go to Malaysia and Angola.

In China, Chavez is to meet with President Hu Jintao and Wen Jiabao, the prime minister, and also visit the eastern city of Jinan.

The Chinese government said Chavez would receive an official welcome on Thursday at Beijing's Great Hall of the People, the seat of China's parliament.

Increased exports

Chavez said the agreements to be signed include accords for China to begin oil production in Venezuela's Orinoco River basin and to jointly develop the eastern Zumano oil and gas fields.

Venezuela, the world's number fifth oil exporter, currently sells 150,000 barrels of crude, fuel oil and other petroleum products a day to China. Venezuela says it plans to increase that amount to 200,000 barrels this year.

The United States is the number one buyer of Venezuelan crude, but Chavez's government has sought to sell more to other countries.

Chavez said he also plans to reach a deal to buy 12 Chinese-made oil drills and to assemble 12 more in Venezuela at a new jointly owned factory.

The Venezuelan leader also said that under other agreements to be signed during his five-day visit, China will help his country build a fibre-optic communications network, rehabilitate a gold mine and cooperate in developing railways and farm irrigation systems.

According to the Bolivarian News Agency, Venezuela has also struck a $1.22 billion deal with China to build 20,000 homes over the next two years in the South American country. The deal will be 75 percent financed by Chinese capital, it said.